We were hoping to achieve the Pearly Gates without having had to mention the name ‘Trump’, however, needs must. The small handed one has lived up to his ‘America First’ policy by imposing a new tax on the interest payments made by the US branches of foreign banks to their parent companies. Under ‘BEAT’ the ‘Base Erosion and Anti – abuse Tax’ (A clear case of the acronym being decided before that which it is acronyming. Your new word for 2018) foreign banks will pay 13.5% tax on a much larger slice of their income. This means that, rather neatly it has to be said, they will not reap the benefits of Trump’s cut in the head line rate of corporation tax from 35% to 21%. Instead, leading global investment banks with their headquarters in Europe including Barclays, Deutsche, UBS and Credit Suisse are having to put extra capital into their US operations in order to comply with the new rules. In general terms, it is unwise to upset major global operations. They tend to talk to one another.
The Trump could well find this one coming back to kick him in the crutch. He probably won’t notice though.
The above is the lead article in our latest monthly News Notes – February 2018. Other topics in this edition include:
- DB Pension Deficits
- Risk to Auto Enrolment?
- MiFID 2 Document Changes – Conducting Business Section
- Key Dates
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